Crude oil futures were up mid-morning Thursday after recovering some of the losses from the oil sell-off early this week, with chances for a slighter higher gain later in the day, an analyst said.
“There is no fundamental news out there … just really a small, positive, shift in momentum that is seeing oil re-coup some of its recent heavy losses, Nicholas Cawley, analyst at DailyFX, told UPI.
As of 10:35 EST, WTI front-month futures traded at $67.15, a 0.5 percent increase. Brent crude futures for front-month delivery traded at $76.53, also up by half a percentage point.
“Momentum is for higher oil prices. There is a technical resistance level around $2 per barrel higher, so there is a little more room to the upside,” Cawley added.
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Crude futures prices fell sharply in the first two days of the week. Brent futures traded early Monday above $80 per barrel, a level it had sustained since September. WTI had seen a level as high as $69.80 per barrel early Monday before the declines.
Earlier in the day, Cawley said in a report that prices were seeing only a “temporarily reprieve” but that crude futures may soon find themselves turning south again, in part due to concern about economic slowdown.
“If the global economic backdrop continues to worsen, support may soon turn into resistance,” he said.
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There are concerns about an economic slowdown in parts of the world, including China, which along with the U.S. is one of the world’s two biggest economies. There has been a trade dispute, including added duties, between the U.S. and China for most of the year.
Crude oil markets saw gains for most of the past year, particularly since September and into the second half of October, fueled in part by concerns about market disruptions as supplies from Iran will likely be affected by the restart of U.S. sanctions by Nov. 5, aimed at curbing oil exports from the country.
Since that time production increases have been announced, in addition to significant output increases already announced for next year, in a context where the worldwide economy may slow if trade disputes continue.
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On Monday, Saudi Arabia’s top energy official said the country had increased production and that it planned to work with OPEC and non-OPEC members to keep the market well-supplied to cover any potential disruption related to Iran or any other country.
BP’s CEO Bob Dudley said in early October that prices were going to decline from a highs of nearly $85 per barrel earlier this month by about 25 percent after a short-period of volatility, in part due to large production increases next year.
In 2019, the U.S. plans to add one million barrels daily of oil production to 11.7 million barrels per day most of it from the Permian basin.